When you see the words "pending" or "under contract" attached to a property listing, both signal that the home seller has accepted a buyer's offer.
The most relevant difference between pending and under contract for a house hunter is one of degree: a house that's pending is further along the home-purchase process than one under contract.
Neither pending nor under contract means a deal's locked up, though — so you may still have a chance to buy a house with either status. However, the odds are more in your favor if the house is under contract vs. pending.
A look at the various statuses a property listing progresses through during the home sale process helps explain why.
What are the different statuses involved in a home purchase?
A property listing generally needs to pass through various stages or statuses before the home is considered sold and can legally change hands. Here are the important milestones in the home-sale process and the listing statuses accompanying each phase.
Active listing
An active listing on a real estate portal means the property is currently for sale, and the seller is actively seeking a buyer. The home is available for viewing, and the seller accepts and reviews offers.
For buyers, this means that there are no contracts in place. So this is a good time to put in an offer. However, remember that you likely won’t be the only person looking at the property.
The status of a property can change quickly, especially in active markets. So, if you’re interested, you’ll want to consult with your real estate agent and make an offer as soon as possible.
Under contract
A listing marked under contract means a seller has accepted a buyer’s offer, but the deal hasn’t closed yet. Sometimes, you’ll see “contingent” or “active-contingent” listed instead of under contract, depending on the statuses used by that particular area’s MLS.
When a home is under contract, other potential buyers can still make an offer on the property, but your offer will be considered a backup offer. This means you’re in line if the initial deal falls through.
In this phase, the seller and buyer actively work to resolve any issues agreed on in the contract, such as paying earnest money costs, meeting timelines, and addressing contingencies.
Contingencies must be met before the contract can be legally binding. But if a problem isn't resolved, the deal can fall through, leaving the home available for a new buyer.
Contingent
Like the status “under contract,” contingent real estate listings mean the seller has accepted a buyer’s offer. However, they're still working through issues agreed on in the home purchase contract, especially contingencies like financing or inspections.
In some markets, the status “contingent,” “under contract,” or “backups requested” may be used interchangeably.
Common contingencies
- Home inspection contingency: allows the buyer to have the property professionally inspected to make sure it’s sound
- Home appraisal contingency: ensures the property’s appraised value is consistent with the asking price
- Financing contingency: allows the buyer to walk away if they can’t secure financing
- Home sale contingency: states that the sale only goes through if the buyer sells their existing home by a specific deadline, which helps buyers avoid carrying two mortgages
Prospective buyers can make an offer on a contingent property. However, your offer is a backup and typically only considered if the original deal falls through due to unmet contingencies or missed deadlines.
Pending
Pending status is the last stage before closing. When a property’s status is pending, a buyer has made an offer and signed a home purchase agreement, and both the buyer and seller have successfully met all contingencies.
However, sometimes the seller and buyer may still be working through contingencies despite the listing saying pending, leaving some room for the deal to still potentially fall through.
While the buyer and seller are close to closing on the deal, a new buyer may be able to put in a backup offer if the seller accepts offers. However, not all sellers will accept new offers, especially if the transaction is on track to be completed.
Sometimes clues in the listing will let you know the seller is open to backup offers, such as:
- Pending taking backups: The seller is taking backup offers, but it doesn’t mean the original sale will likely fall through.
- Pending short sale: A short sale occurs when a house goes on sale for less than the amount owed on the seller’s mortgage. The transaction must be approved by the seller’s lender. These sales are less predictable since the buyer and seller don’t have a full say so deals can fall through.
- Pending—more than four months. This indicates extended delays, which may indicate potential problems and an opportunity for backup offers.
Sold
A house listed as sold or closed is no longer available. Typically, the listing agent updates the status within three days of the property closing. In this case, all a prospective buyer can do is contact the new owner to see if they're willing to sell.
However, some sellers may list their homes off-market rather than on the MLS to avoid the sale becoming public knowledge, to minimize foot traffic and showings, or to generate interest before listing.
You can’t search Zillow or other popular MLS marketplaces to find off-market properties. But you can look for these opportunities through:
- Real estate auction websites
- Off-MLS marketplaces like HomeFinder or Auction.com
- Talking with real estate agents with experience with off-market or pocket listings
Finding off-market homes can take more time, and it may be more challenging to determine the property’s fair market value. So, you’ll want to perform a comparative market analysis on any home you’re interested in to help guide your offer.
Can you still make an offer?
Technically, you can make an offer on a home under contract or pending. But your offer is more likely to be accepted on a house under contract than one that’s already gone to pending.
Additionally, there may be instances when sellers aren't accepting backup offers. However, it never hurts to have your agent reach out to the seller’s agent if you’re very interested in a property, no matter its status.
Can you make an offer on a house that's under contract?
Yes, you can make an offer on a house under contract, known as a backup offer. Your backup offer is a contingency plan for the seller if the initial deal falls through.
At this stage, there are still many potential reasons that the original buyer’s offer could fall through, such as problems securing financing, unexpected issues with the home inspection, or home appraisal discrepancies. In this case, sellers may prefer to consider backup offers to avoid putting the home back on the market and starting over if the original deal falls through.
Submitting a backup offer can work for buyers, especially in competitive real estate markets where properties often receive multiple offers. However, remember that your offer will typically only be considered if the initial contract is canceled.
You’ll need to be prepared to wait and potentially receive only limited updates until the initial offer is resolved. A real estate agent can guide the likelihood that your backup offer could be accepted and if it's worth putting in the offer.
If you want to put in a backup offer, Ryan Fitzgerald, realtor and owner of Raleigh Realty, recommends buyers “submit your strongest possible offer but know that the seller has no obligation to consider your offer further since the home is under contract.”
Can you make an offer on a house that's pending?
Yes, you technically can make an offer on a pending house. However, the chances of the original deal falling apart at this stage are low since the current buyer and seller are deeper into the process.
For instance, the buyer typically has secured financing, inspections and appraisals are completed, and other contingencies have been met. As a result, some sellers won't consider other offers.
“In my experience, deals can fall apart at any stage,” states Noah Guthart, COO and founder of Panacrypto, a luxury real estate brokerage. “But the likelihood of a deal falling through is lower once all contingencies are cleared.”
However, a property listing will sometimes feature a more detailed “pending — taking backups” designation, so you’ll know the seller’s open to an offer.
If you don’t see such a designation, your agent can contact the seller’s agent to find out how things stand with the initial buyer’s offer and if the seller accepts backup offers.
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How to make a backup offer on a house that's pending or under contract
Pros and cons of making a backup offer
Pros
- If the initial deal falls through, you reserve the next spot in line.
- You're making it clear that you're a motivated buyer. Many sellers appreciate that.
- You may be able to avoid a bidding war.
Cons
- Any home inspection issues that led to the original offer being canceled are now your concerns.
- You may waste time waiting and miss other opportunities.
- The seller could be using your backup offer to motivate the original buyer.
If you want to make a backup offer on a home under contract or pending, you'll first want to consult your agent.
A good real estate agent can determine how open the seller is to taking backup offers and help you determine whether your offer may stand a chance. This step lets you avoid wasting your time if the seller isn’t accepting offers or the chance of success is very low.
When making a backup offer, you should submit a strong, competitive offer, especially since the seller may have other backup offers to consider.
For instance, Brett Johnson, real estate agent and owner of New Era Home Buyers, stated, “I once had a client secure a home listed as “active-kick out” by offering a stronger, non-contingent deal, which the seller couldn’t resist.”
Making a backup offer allows you to still buy the house if the initial deal is canceled. However, making a backup offer can have drawbacks. For instance, you’ll need to make an earnest money deposit, which could tie up your money until the initial deal is resolved.
What are the odds of a home sale falling through once under contract or pending?
The odds of a home sale falling through once it's under contract are low. According to the National Association of Realtors, only 5% of contracts were terminated in the three prior months.[1]
However, every transaction is unique. So, if you’re interested in a property, talk with your buyer’s agent. Eric Bramlett, realtor and owner of Bramlett Real Estate, states, “It’s hard to assign exact odds. Each case varies. I’ve seen deals fall through late due to major life changes, buyers backing out, or unknown deal-killers cropping up.”
According to industry surveys of top agents, the main reasons sellers or buyers cancel contracts include:
Home inspection issues
Half of sellers canceled a signed contract because buyers made unreasonable demands after the home inspection.[2]
Alternatively, a buyer may end a contract if the home inspection reveals significant issues or the seller won’t make the repairs. These situations can present an opportunity for you to buy the home. But you’ll need to consider whether you want to address the issues discovered during the home inspection.
Financing issues
Another common reason for contracts to be canceled is if the buyer’s financing falls through. Only 28% of buyers made all-cash offers, indicating most buyers finance their home purchases.[1]
So, even though most prospective buyers will have a mortgage preapproval when they make an offer, changes that impact the buyer’s financing can still occur. For instance, interest rates can increase, making mortgages too expensive. Or, the buyer can experience a change in their situation, such as a job loss or a decrease in their credit score.
Appraisal discrepancies
Jut 8% of home-purchase contracts were canceled by buyers due to home appraisal discrepancies.[2] This issue can occur when the property buyer's lender's appraisal is lower than the agreed-upon price. The buyer may have to cancel the contract unless they can resolve the difference since the lender will only loan up to the appraised amount.
Buyers underestimate costs
Buyers may also realize they have underestimated the total costs and may have to back out of the deal. For instance, sometimes buyers don’t realize how the insurance, taxes, and other fees can add up.
Sellers receive a better offer
In some cases, a seller may be able to continue showing and accepting new offers after receiving a contingent offer, such as when a kick-out clause is included in the contract. As a result, a seller can take a new offer that’s better or faster, resulting in the original deal being canceled.
Contract timelines not met
Real estate transactions involve very specific time frames, especially when contingencies are involved. The deal can be terminated if the contract deadlines aren’t met on time.
Title issues
Just 1% of buyers cancel their contracts due to unresolved title or lien issues.[2]
In this situation, a lien — a legal claim against the current property owners — turns up in a title search, which could leave the new owner responsible for the debts. If the title isn’t clear, the buyer can cancel within the agreed period if the issue can’t be resolved.
Frequently asked questions
What does pending mean?
Pending means a buyer has made an offer on a property, signed a home-purchase contract, and that most of the contingencies have been resolved by the buyer and seller. You may still be able to make a backup offer on a pending listing, but it's unlikely to go through unless there are last-minute issues with the buyer's financing.
What does contingent mean?
A contingency is a condition that must be met before a contract is legally binding. In real estate, contingencies are included in most home-purchase contracts and usually address financing, inspection, and appraisal concerns.
Is pending better than contingent?
Pending isn't better than contingent for a potential buyer. It means the initial buyer has cleared their contingencies, but the deal isn't closed. As a potential buyer, you're not out of the running for a pending house. But it's a longer shot than for a home designated as contingent.
